Auction

In Pixcross, the liquidation of a loan is executed through a transparent and structured auction mechanism. This process is triggered when the value of the collateral falls to or below the predefined Liquidation Threshold (LTH), signaling a default condition. At this point, the collateralized asset—typically an IP-backed NFT—is listed on the platform’s Auction page and made available for bidding.

Auction Workflow

1. Auction Trigger When the real-time value of the collateral equals the liquidation value (as defined by the LTH), a liquidation event is initiated. The collateral is immediately listed for auction.

2. Initial Bid The auction formally begins with the first bid, which must be equal to the total outstanding debt on the loan, including any accrued interest. The bidder's funds are locked to ensure bid validity and commitment.

3. Auction Duration The auction duration is fixed at 24 hours, starting from the time the first valid bid is placed.

4. Subsequent Bids Each new bid must be at least 10% higher than the previous bid. When a new bid is placed:

• The prior bidder's funds are automatically refunded.

• The new bid amount is locked until it is either outbid or the auction concludes.

5. Auction Settlement At the end of the 24-hour period, the auction is finalized:

• Ownership of the collateralized IP/NFT is transferred to the highest bidder.

• The proceeds from the winning bid are used to repay the outstanding loan, including interest.

• Any surplus funds—if applicable—may be returned to the original borrower, depending on protocol rules.

Integrity and Incentives

This auction model ensures:

• Fairness, by providing a time-based, open bidding process.

• Transparency, with all activity recorded and visible on-chain.

• Lender protection, by prioritizing debt recovery through market-driven pricing.

• Bidder confidence, through locked funds and immediate refunds for unsuccessful bids.

Pixcross’s liquidation and auction system is an integral part of its risk management framework, maintaining a healthy lending ecosystem while upholding the rights and interests of all participants across supported networks—Ethereum Sepolia, Base Sepolia, Arbitrum Sepolia, and Avalanche Fuji.